Corporation Tax Act 2010 section 357GCZB

Exclusive licence held by another party to CSA

Section 357GCZB deals with how a company within a cost-sharing arrangement (CSA) is treated for Patent Box purposes when another party to the CSA holds an exclusive licence over a qualifying IP right, and the company itself holds neither the right nor an exclusive licence to it.

• Where another party ("P") in a CSA holds an exclusive licence over a qualifying IP right, and the company holds neither the right itself nor another exclusive licence to it, the company is deemed to hold an exclusive licence for Patent Box purposes.
• The right is treated as a new qualifying IP right for the company if either the company or P joined the CSA on or after 1 April 2017, or if the right is already a new qualifying IP right for P.
• Grandfathering protection applies so that the right is not reclassified as new if the company already held the right (granted before 1 July 2016 or assigned before the relevant date) or already held an exclusive licence (granted before the relevant date) before joining the CSA.
• If the right does not qualify as a new qualifying IP right under these rules, it is treated as an old qualifying IP right, preserving the company's position under the pre-2017 Patent Box regime.